(H/T – Michael King’s Facebook page)
Here’s a problem that KRM won’t have…
[youtube]http://www.youtube.com/watch?v=mKOEQVgONh0[/youtube]
No Runny Eggs
The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.
December 24, 2008
December 23, 2008
The Morni…er, Evening Scramble – 12/23/2008
Let’s see if I can still remember how to do this…
[youtube]http://www.youtube.com/watch?v=z2nQZPC2uTs[/youtube]
Yes, it’s evening, but it is morning someplace.
- Jason Pye brings good news for music pirates – RIAA will no longer be going after you with lawsuits. The bad news – if your ISP isn’t using anti-bit-torrent software, it likely will in the near future.
- Donna Martinez has sad news for VHS holdouts – the last shipment of movies and shows on tape are out the door.
- JackBoot found Treasury Department Form EZ-CASH. Given Hank Paulson and company are handing out my cash like it’s, well, my cash in a politician’s hands, I’m not so sure that it is a parody.
- Mark Pribonic shows a benefit of a classical education, quoting Cicero on the folly of depending on the government for a bailout.
- Jib gives a word of wisdom to the potheads that want legal pot. If you think that taxes on alcohol and tobacco are high, wait until the government gets its hands on the weed.
- Dean finds the ‘Rats not so trusting of the voters when things don’t go their way. I’m shocked, SHOCKED, especially since…
- …Nice Deb outlined how they stole the Norm Coleman seat. Shoebox? Big G?
- Earl Glynn wonders how the population of Kansas could go up steadily while the voter registrations show wild swings.
- Bob Weeks bemoans the coming death of “newspaper journalism”. I only hope he wasn’t refering to outfits like the New York Times.
- Why did I put that caveat in there? Exhibit #1 – Michelle Malkin caught them getting punked by fake Frogs.
- Exhibit #2 – Bob Owens prints the op-ed piece rebutting Friend Of Barack (and admitted, yet untried terrorist) Bill Ayers they refused to print.
- Dan Riehl says the news isn’t all bad – the NYT may go under next year.
- The Game lists the top ten media blunders (so far) of 2008. To quote Bachman Turner Overweigh…er, Overdrive, “You ain’t seen nothing yet.” Guess it’s time for song #2…
[youtube]http://www.youtube.com/watch?v=Jnd8ArBkKtA[/youtube] - Tom Blumer proves that The News Organization That Cannot Be Quoted™ does not practice what Bob Weeks wants, as they strip the ‘Rat from local stories they crib. Bonus item – it is against the latest publicly-available AP Stylebook guidance, though that may have changed since 2000.
- Gorebal “Warming” Acolyte Stupidity Watch, Part 1 – lawhawk reports Seattle refuses to use salt on the roads because it might get into the salty Puget Sound.
- Gorebal “Warming” Acolyte Stupidity Watch, Part 2 – Dad29 reports the Wisconsin DNR prohibits the dumping of snow into the local rivers that feed into Lake Michigan, so Milwaukee stores the snow under the Hoan Bridge until it melts into Lake Michigan. Oh yeah; between today and tomorrow, there’s another foot of snow to go on top of the nearly-3 feet we’ve picked up so far this month.
- Mary Katharine Ham wonders why the Obama Camp self-whitewash happened at 4:30 pm Christmas Eve eve.
- Why, Part 1 – Michelle Malkin opened a red flag store on the 5-page whitewash.
- Why, Part 2 – Charles Johnson found a media outlet unwilling to swallow the whitewash whole. In the interest of full disclosure, the parent company of the Los Angeles Times was driven into bankruptcy partially because of actions by Illinois Gov. Rod Blagojevich (D).
- Rob Port found the denials from Team Obama a wee bit unconvincing.
- Hugh Hewitt wonders what happened when US Attorney Patrick Fitzgerald, who is investigating Blagojevich, interviewed Barack Obama (D). Bonus wonder – why did Fitzgerald wait until after interviewing Obama to interview Obama chief-of-staff-designee Rahm Emanuel (D) when he already had Emanuel on tape?
- J.D. Tuccille found the perfect present for the speed cameras in Arizona.
- Mark Hemingway found high school students in Maryland using the power of the state and speed cameras to crush their enemies. They’re future bureaucrats, no doubt.
- Speaking of presents, Owen found a DeWalt Rapid Fire Nail Gun. I wonder if that’s the weapon the boys at iD were thinking about when they made Quake.
Web news profitable? Not quite yet.
(H/T – Patrick McIlheran via Dad29)
Jeff Jarvis ran with a “throwaway” line from Los Angeles Times editor Russ Stanton stating that the LAT web revenue now exceeds its editorial payroll costs, and speculates that the LAT could switch to a web-only model. There’s a few problems with that:
– The editorial staff is a small part of the newsroom, even the local-only newsroom.
– The web server and technical support for a high-traffic website is not cheap.
– A major metropolitan daily cannot, despite claims to the contrary, focus solely on local and get away with it. Does anybody believe depending on, say, the Washington Post for DC news or the Sacramento Bee for Californai statehouse news is going to be cheaper than relying on The News Organization That Cannot Be Quoted™ (that would be AP), or Reuters?
– Fee-based content, as a rule, does not draw enough to cover the costs.
Maybe if they got rid of the editorial staff, which is the largest bit of aggravation, they could be profitable. I still doubt it, though.
Looking Through a Glass Darkly
As the bail out of The Big 3 has been discussed the past few weeks, much has been made about the unsustainable cost structures that they have. Depending upon the report you see, Detroit’s automakers pay somewhere around 60% more per labor hour than their domesticated foreign competitors. The UAW President, Ron Give-U-the-finger, will quickly contend that Detroit is only paying a dollar or so more than their competitors. The truth is that both statistics are accurate. How can that be?
When UAW Ron gives you a labor rate, he wants to talk only about the wages that are actually paid to workers that are assembling cars today. While that is a labor rate, it’s not the one that is used by accountants in determining costs. The labor that is 60% higher includes not only the costs of the people on the line today but also includes the costs of providing retirement benefits for folks who worked that line year and year ago.
Mark Steyn provides some information of how challenging the Big 3’s labor issue is in a column from Friday:
General Motors, like the other two geezers of the Old Three, is a vast retirement home with a small money-losing auto subsidiary. The UAW is AARP in an Edsel: It has three times as many retirees and widows as “workers” (I use the term loosely). GM has 96,000 employees but provides health benefits to a million people.
Holy upside down, Batman! It’s not hard to understand why the Big 3 have profitability issues when they are paying for 10 employees for every 1 they have working!
Now to be fair, GM, Ford and Chrysler each negotiated contracts that provided for this level of benefit. The UAW retirees are getting no more or less than what was agreed to in those contracts. My point here is not to argue what should be done about those agreements, just to let you know they are there.
In 1960 there were 5 workers for every individual who was receiving Social Security. Today, that ratio is around 3.3 to 1. Most analysis of the solvency of Social Security suggest that in the future we will see 2 workers supporting 1 retiree. Anyone noticing a trend?
Many people are upset with the Detroit Big 3. They are upset about the bail out. They are upset that the auto makers have had an unsustainable cost structure for years and have either moved slowly or done nothing about it.
It’s funny how many in Congress and the general public are quick to point to the Big 3 executives and brow beat them for not anticipating their problems and dealing with them. Yes, many people willing to point the finger at someone else but when it comes to dealing with a similar problem that they control or are impacted by…..say Social Security, they are perfectly willing to turn their head and look the other way.
If you think the bail out of Detroit’s retiree’s is a problem, you ain’t seen nothing yet!
December 22, 2008
220, 221. Whatever It Takes
Obama Expands Recovery Plan, Aims for 3 Million Jobs
As this story lays out, President elect Obama believes that the economic down draft is more serious than he first thought. As a result, his original goal of creating 2.5 million jobs appears inadequate. He now wants to target creating 3 million jobs.
Lest you think Obama’s is the “Gang who can’t shoot straight” and will charge in without a plan, put your worries to rest:
Obama representatives met this week with congressional staffers to discuss a plan estimated between $675 billion to $775 billion, the aide said, though earlier this week another aide said Obama may ask Congress to approve as much as $850 billion. Obama hasn’t specified a figure.
Those figures are all before Hank Paulson, or his successor, go to Congress to get the remainder of their $750 billion “mad money” pool.
Further, wanting to appear the adult in this new regime, Barack has told “the kids” not to have any parties with the tuition money:
Obama during the meeting told his advisers that spending proposals can’t include lawmakers’ pet spending projects; that funds should be directed toward already approved projects so jobs can be created quickly; and that government should help facilitate private ventures by removing bureaucratic red tape. (emphasis mine)
Does anyone really believe that the government can spend $850 billion without funding “pet projects?” Is anyone so naive to believe that, unless you’re one of those favored vassals like Hank Paulson, Fannie Mae, Freddie Mac or ACORN, for whom accountability is not a prerequisite, that the government could infuse $850 billion into projects with out increasing red tape, let alone, decrease red tape?
In the movie “Mr. Mom,” Jack (Michael Keaton) takes the role of “domestic engineer” after he is laid off and his wife, played by Teri Garr, lands a role as an advertising executive. Jack’s role as domestic engineer is not his dream role and part of the plot focuses on the challenges he has reconciling his new responsibilities with his personal definition of masculinity. At one point in the movie, Garr’s new boss picks her up at the family home. While waiting for Garr to get ready for a business trip they are taking, her boss makes small talk with Jack. As the boss is unable to relate to Jack as the domestic engineer, he asks about Jack’s home remodeling project that he has undertaken. He asks Jack whether he’ll be wiring 220 electrical service with the remodeling. Not knowing anything about wiring, but wanting to ensure that he portrays that he hasn’t lost an ounce of masculinity, Jack answers “220, 221. Whatever it takes!”
When it comes to job creation and printing of inflationary dollars to cause it, Barack Obama is using the same false Machismo that we saw from Jack in “Mr. Mom,” 2.5, 3 million, whatever you need. $675, $850 billion, $1 trillion, whatever it takes.
December 20, 2008
How’s That Class Envy Working Out For You?
NY Governor David Paterson announced that the State of New York will be short $178 million in tax revenues because six top Goldman Sachs executives decided to skip bonuses.
Funny….when incomes go down so do taxes. When big incomes go down, taxes go down big. Who’d a thunk?
I will give Governor Paterson kudos on one observation:
If the states and federal government do not get spending under control, we will graduate to a 10-year recession,” Paterson told reporters in a conference call, warning a depression could follow.
One Governor has it right and unless you are Barack Obama, that leaves 49 and a Federal Government to go.
December 19, 2008
New NRE poll – Which of the Big Three (if any) will be in essentially its pre-12/2008 form come 12/2018?
Shoebox asked the question. While I can’t officially condone gambling (at least if you use Hot Rod Blago as your bookie), I can officially condone an NRE poll. You can take up to 3, but I will wipe out any multiple answers that include “None of them”.
Which of the Big Three (if any) will be in essentially its pre-12/2008 form come 12/2018?
Up to 3 answer(s) was/were allowed
- None of them (43%, 36 Vote(s))
- Ford (37%, 31 Vote(s))
- General Motors (15%, 13 Vote(s))
- Chrysler (5%, 4 Vote(s))
Total Voters: 75
Loading ...“It Is Finished”
With that, he bowed his head and gave up his spirit. John 19:30
And so it is with George Bush.
Several sources are reporting that President Bush has decided upon a bailout package for the auto industry. The package is said to be as much as $17.4B pending Congress’ approval of the second tranche of TARP funds.
According to the Politico, the loan provisions look very much like the package defeated in Congress last week but, includes the “Corker amendments,” although as part of the “non binding” parts of the loan. As Non binding, the Corker amendment terms will be suggested targets but not absolute requirements.
I’m on record as supporting the government providing debtor in possession financing to support an “orderly” bankruptcy. It sounded recently as if Bush was headed down that path. By having an “orderly bankruptcy,” the companies would get the fund they need to operate while they were put into bankruptcy to do the gloves off negotiation required to get all parties to an agreement that might allow for survival of at least one of the auto makers.
With the announced plan, Bush has let the UAW off the hook in providing any meaningful assistance to the health of the industry. Rather than make requirements of the union issues, he included them as “targets.” These “targets” will get thrown by the wayside the minute that Democrats are faced with the choice of a hostile union or turning the other cheek and making the auto industry nothing more than a vassal of the government.
Revisions/extensions (9:38 am 12/19/2008 – steveegg) – Here’s the video of Bush giving up the ghost (from MSNBC via Allahpundit)
Visit msnbc.com for Breaking News, World News, and News about the Economy
That under-the-bus moment for the Corker amendment suggestion will come at 4:05 pm EST 1/20/2009.
Only Nixon could go to Red China, and only Bush could put the final nail in the coffin of free markets (tombstone shamelessly borrowed from Michelle Malkin)…
R&E part 2 (4:02 pm 12/19/2008 – steveegg) – Lawhawk found the terms of the loans for both Chrysler and GM. The terms of the 3-year loans are as bad as I feared:
– All of the anti-management requirements in the House bill are there.
– The anti-UAW provisions are but “targets” that the Obama administration will judge. Any takers on the equally-vague “fuel efficiency”, “advanced technology vehicles” and “competitive product mix” targets being much more vigorously enforced for the benefit of the Gorebal “Warming” acolytes than the calls for the end of the Jobs Bank or reduction in salaries/benefits to the levels paid by the Japanese Big Three?
– The interest is based on the 3-month LIBOR plus 300 basis points (or a minimum of 5.00%), which changes to the 3-month LIBOR plus 800 basis points (or a minimum of 10.00%) if the loan changes to a Debtor-In-Possession loan. Anybody else find it curious that the Treasury isn’t using the Fed rates?
-The Treasury Department will be, in lieu of taking an ownership stake in Chrysler, tacking on an additional 6.67% in its loans to Chrysler, or $266.8 million (for a grand total of $4,266,800,000).
– The Treasury Department (read, taxpayers) will be taking 20% of the loan GM’s market capitalization (as the “warrant limit” will hit first) in the form of perpetual-term warrants for common shares the Treasury promises not to exercise its right to vote except in cases of a “termination event” or bankruptcy. At last check, the market capitialization of GM was $2.74 billion, which would make that about $548 million.
– Since that “warrant limit” is lower than what the Treasury wants for either the $9.4 billion that is guaranteed to go out the door before Bush leaves or the $13.4 billion that is, in part, held hostage by Congress, the Treasury will be taking an additional amount in loans in a method similar to Chrysler.
– In order for GM to lose the warrants after it pays back the loans, they have to buy back the warrants at the market price. In short, we’re going to be owning GM for a long time.
Oak Creek plowing – 12/19/2008 – much better
I don’t know if was me that got results, but for this snow-bomb, Oak Creek got out there well before 5 am. In fact, they were working on my subdivision at 4 am.
See how much easier it is when the 4-hour prohibition on parking on the streets is taken advantage of, and 11 hours’ worth of packed snow isn’t being fought? It makes even a lot of snow (9 inches and counting) easier to handle.
Revisions/extensions (8:20 am 12/19/2008) – Don’t say I never give the Soviets any props. My blogfather used to have this propaganda piece up at Spotted Horse when the White Death threatened us…
Everyone to the fight with the Blizzard!
R&E part 2 (4:05 pm 12/19/2008) – I can see pavement! MUCH better than last time.
A Rose By Any Other Name…
It’s not only US Auto companies that are looking for a bail out.
According to this article in the UK Independent, Britain is looking to do a bail out for Jaguar. It looks like the automaker PR playbook has been sent to the UK press:
The luxury car firm employs 15,000 workers in the West Midlands and a further 60,000 other jobs in the region rely indirectly on the firm.
Like the US government, the British government is looking to provide loans to help the auto industry weather the dramatic downturn of vehicle purchases. In Britain’s case, they are looking to loan the equivalent of $1.5B, to Jaguar’s Indian owner Tata.
Like the US’s Chrysler, Jaguar was recently acquired. Unlike Chrysler, Jaguar was acquired by a company who has experience in the automotive industry. In both cases, the fact that they were recently acquired would almost be enough reason to say “caveat emptor” and let them fend for themselves.
Like the situation in the US, the British politicians are trying to weigh the political implications of a bailout:
Ministers are also conscious of several marginal parliamentary seats in the West Midlands. Seven constituencies – including Redditch, held by the Home Secretary, Jacqui Smith – would fall to the Conservatives with a swing of 5 per cent. Another three would be captured by David Cameron if the swing is 10 per cent.
Apparently, economic scale doesn’t work just in global sales. The Jaguar deal at $1.5B amounts to $100,000 for each direct job at Jaguar. In the US, with a price tag of $15B being discussed and approximately 240,000 direct auto jobs, we benefit from the rollback price buying an industry for just $65,000 per direct job.
Of course, our rollback number could change dramatically. If, as some have estimated, the total US bailout comes to $30B, we now pay $130,000 per direct job.
Unlike the US industry, which is not only suffering negative cash flow but with the exception of Ford in 2005, has not seen any profits for the past several years, Jaguar has been profitable:
Jaguar has told ministers it is a healthy and viable business – making a £327m profit last year and a £310m profit in the first half of 2008 – but has asked for help guaranteeing “short-term liquidity” because the major banks are reluctant to lend cash during the downturn.
A bailout by any other name still smells rotten. However, while $1.5B is a lot of money, Jaguar has an existing business plan that works, Jaguar isn’t facing the equivalent of a multiple organ transplant and hoping to accomplish it with a simple appendectomy. With a straight face, Jaguar and the British government, can actually argue that they aren’t providing a bailout but ,rather a loan to allow an otherwise healthy and profitable company, the ability to weather extraordinary times.
If only we were so lucky!
December 18, 2008
Bolin out, Blickensderfer in as Kenseth’s crew chief
This bit of good news comes straight from MattKenseth.com. After suffering through a winless year with Chip Bolin as crew chief of the #17 DeWalt Ford driven by Matt Kenseth, Roush Fenway Racing has returned Bolin to the team engineer position and promoted Drew Blickensderfer to the crew chief slot.
Blickensderfer is a very good crew chief. In 2006, he helped guide Danny O’Quinn to the rookie title. In 2007 and the first part of 2008, he and Kenseth teamed for 3 wins, 17 top 5s and an average finish of 10.3 over 28 starts before he switched to Carl Edwards’ Nationwide team. Those two teamed for 7 wins in 19 starts.
As someone who has seen Bolin blow late-race call after late-race call, with the last blown call of putting in only enough gas for 396 miles and change in the Ford 400 costing Kenseth a trip to New York City, I’m very happy. Bolin knows how to build fast race cars, so that part is still good.
And The Winner Is…
The Whitehouse continues to try and find a way to funnel money to the automakers. They continue to focus on using Tarp funds, an approach that some claim may be illegal/unconstitutional. In the meantime, the war of words about whether or not to save Detroit, and why, continues to escalate.
In the far corner, we have an Op Ed piece in the Washington Post, Harold Meyerson claims that the UAW is the cornerstone of the liberal movement and middle class America. For this, he claims, Republicans are out to destroy the group and are willing to sink the country into a depression to sate their political bloodlust:
Over the past several weeks, it has become clear that the Republican right hates the UAW so much that it would prefer to plunge the nation into a depression rather than craft a bridge loan that doesn’t single out the auto industry’s unionized workers for punishment.
In the near corner we have an editorial in the Investor’s Business Daily. IBD not only refutes Meyerson’s claim that UAW is responsible for the existence of the US middle class, but identifies not only why the UAW’s position is unsustainable but unknowingly, why the Detroit as a whole is unworkable:
History teaches a couple of lessons here. One is that, as the labor movement boasts, wages and benefits did indeed rise in the late 1940s and 1950s, when private-sector unions were at their maximum strength.
No fact makes this point better than the UAW’s own dramatic shrinkage, from 1.5 million members in 1979 to fewer than half a million today. Such is the downside to a strategy of raising wages through collective muscle. When labor gets priced to a point where a machine can do a job more cheaply than a worker, the worker is out of a job.
But another lesson is that American industry had unusual advantages during that time, when Europe and Japan were still rebuilding and offered no serious competition. It was a phase that could not last, and unions could not stem the drain of jobs out of the U.S. manufacturing sector.
Like the star high school quarterback, both the UAW and the Big 3 are unable to look at today’s reality and adjust to it. Rather, they look to their glory days of old and pull out the home town paper’s articles of their game winning touchdown throws, thrusting it in front of us as evidence that because they were once stars, they can be stars again. Unfortunately, few high school quarterbacks find that a winning touchdown pass defines their success 20 years after the fact.
Both the UAW and auto executives are to blame for the situation the Big 3 are in. Neither have been forward looking enough. The UAW believes that they can hold on to wages and work conditions that worked in times of lower competition and management has failed to adjust the business model to reflect the same reality.
I’ve ranted a fair amount about all the things I don’t like about the auto bailout. However, I don’t think it’s fair to just be anti everything. As Conservatives we need to be more about answers not Monday morning quarterbacking. So here’s my answer to the bailout.
Fronting the Big 3 a bridge loan and “hoping” that things will change is the definition of insanity. Once money is provided and the government is on the hook there will be all kinds of political reasons to “look the other way” and as a result, end up making the auto industry look like Amtrak and providing unending subsidies. Rather, the Big 3 need to enter a prepackaged bankruptcy.
Contrary to some chicken little pundits, bankruptcy will not drive consumers away from the Big 3. Indeed, where else would someone go to buy a light truck? By going to bankruptcy, all interested parties get tossed into the same pot i.e. all contracts are null and we renegotiate from the facts of today. This puts management, bondholders, vendors and the union on the same level field. I would also be in favor of the government providing debtor in possession guarantees to allow the bankruptcy procedure to transpire.
My solution will cause some to banish me from the Conservative parade as a non purist. Maybe so. However, not everything in life is black and white and this is particularily so in politics. There are times where pragmatism i.e. the Dems are going to put this money in Detroit’s pocket…do you want no say or to try to find the best possibility of success, needs to be taken into account.
It seems like the bail out is going to continue to roil in Washington politics. It’s hard to see how it will end. One thing I’ve become fairly certain of is that regardless of how this moves forward, the winner will be no one.
December 17, 2008
Snow plowing in Oak Creek – FAIL
Let’s run through the timeline on this past storm:
– Snow starts falling at Mitchell International (just north of Oak Creek) – sometime between 12:52 pm and 1:52 pm.
– Accumulation in my driveway at 5 pm when I left to pick up my younger sister from the airport – approximately 1 inch
– County plows spotted – several times between 5 pm and 8:30 pm
– Majority of snow ends at Mitchell – prior to 8:52 pm
– Last of the snow ends at Mitchell – prior to 12:52 am
– Total amount of snow at Mitchell – 2.4 inches
– Major thoroughfares in the city of Milwaukee plowed – prior to 4 am
– First city of Oak Creek plow sighted – 5 am
– Time my subdivision got “plowed” (the term is used loosely because there is a layer of snow and ice still on the streets) – 7 am (there is a school in the subdivision that opens at 8 am)
This, in a city that last year, found enough additional spending to raise the property tax levy increase from a 3.80% increase to a 3.86% increase, in a city that just spent over $8 million on a new garag…er, Taj Mahal for the Street Department, in a city where the mayor wants to build a $20 million monument to himself under the guise of a new oversized city hall/library combo complete with underground parking, and in a city that, in addition to taxing to the max, is raiding just about every last fund that has a positive balance to mask the true increase in spending, is fucking unacceptable.
Deeply Troubling
Those are the words that SEC Chairman, Christopher Cox uses as he describes his agency’s inability to ferret out the Madoff ponzi scheme despite “credible and specific warnings” going back to 1999. Cox goes on to say:
"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them."
Besides ignoring warnings about Modoff’s investment practices, it turns out that Madoff had a family relationship connection to the SEC and Madoff personally:
sometimes consulted with the SEC on how to regulate markets and sat on a panel of academics, regulators and executives formed in 2000 to give the agency advice on new stock market rules in response to the growth of electronic trading.
Cox has been a one man clueless show throughout this entire economic meltdown. Among his more egregious actions, or lack thereof, were not requiring financial statement clarity for many of the “exotic” financial instruments, not removing mark to market requirements and issuing a statement that even further muddled the mark to market requirements.
Obama has yet to announce his choice for SEC chair although he reportedly has a list down to about four names. As with any political appointment, there will be some risk of ideology influencing focus and agenda. However, regardless of who Obama picks, it’s hard to imagine anyone on Obama’s list being as out of touch as Cox has been with his responsibilities. Cox is the poster child of “deeply troubling!”
December 16, 2008
Five myths about U.S. deterioration
This is a very good read concerning the good old USA and how we continue to lead the world in the evolution to a global communication, information and technology economy……
For months now, the nation’s economic obituary has been splashed across the front pages of nearly every newspaper in the country. Journalists and pundits alike have warned that America’s long-running global dominance has come to a screeching halt, eclipsed by growing markets in such places as China and India and frittered away by our own mismanagement, excesses and myopic approach to the future. We’re long past due for a reality check. The United States and the incoming Obama administration face formidable challenges, but the country is by no means on its last legs. Here are a few key myths that need to be dispelled.
1. The United States has lost its competitive edge.
Not by a long shot. By almost any measure, the United States continues to outperform other countries around the globe (including rising giants China and India) in such areas as innovation, technology, higher education, worker training, the ability of the labor force to move from job to job and more. Just this fall, the Swiss-based World Economic Forum released its latest global competitiveness report, and once again, the United States easily topped the list. The study noted that despite the current financial turmoil, the United States is blessed with strong productivity and can “ride out business-cycle shifts and economic shocks” better than other countries.
2. The United States long ago gave up its global lead in manufacturing.
Not yet. Yes, U.S. production plummeted this fall, and yes, the domestic auto industry — the poster child for America’s aging manufacturing infrastructure — will never return to the output it could manage a decade ago. But even with all this grim news, the United States has held onto its manufacturing lead — particularly in such key sectors as pharmaceuticals and aerospace, in which it produces almost 25 percent of the world’s output, according to the World Bank. China produces roughly two-thirds that amount, the bank notes, and the global downturn has badly hurt its manufacturing sector over the past several months. Sure, China and India have been closing the gap, but with a little bit of creativity, vision and determination on the part of U.S. industry, the Obama administration and Congress, we can hold our own.
3. The U.S. economy is about to be eclipsed by China’s.
Not for some time to come. The World Bank estimates that global GDP last year was more than $56 trillion. The United States contributed almost $14 trillion (or 25 percent) of that amount. China’s total economy amounted to a bit more than $3 trillion. Of course, China and other countries such as India and Brazil are growing far faster than the United States, but then again, we were wealthier to begin with. Let’s be realistic. The turmoil in the financial markets will reduce U.S. GDP in 2008 and 2009, but China’s economy will contract, too. No matter how you calculate growth projections, realistically, it will be decades before China is within striking distance of the United States. And as for those other budding economies now coming online, don’t expect them to outstrip us any time soon, either. Despite its strong growth rates, Brazil has an economy that’s approximately the size of Florida’s and Illinois’ combined. Russia, which spans 11 time zones and has vast natural resources, had an economy that was on a par with that of Texas last year. Even India, a bright spot on the global stage for almost a decade now, still has a GDP that’s less than half of California’s. These countries will be formidable indeed at some point, but they still have a long way to go.
4. The United States is no longer the economic engine of world trade.
Not true. For three decades now, we have amassed staggering trade deficits, amounting to several trillion dollars (and growing), but U.S. consumers have still helped add substantially to the growth of most countries around the world.
When it comes to imports, of course, the United States buys far more products from overseas than either China or Germany. But in terms of exports, all three countries are closely bunched together, at just over $1 trillion each. There is simply no country, now or in the immediate future, that can replace the United States’ sheer global buying power.
5. The United States is no longer an attractive market for investment.
Hardly. Investments here are transparent, well-protected and have a long track record of healthy returns. So even with Wall Street reeling, the United States is a compelling place to invest. Of course, today’s liquidity crisis originated here, but the value of the U.S. dollar has risen dramatically over the past few weeks, and foreign investors have flocked to U.S. investments and financial instruments as a (relatively) safe haven amid global uncertainties. No wonder the United States attracted more than $2 trillion worth of foreign direct investment last year, according to the World Bank and the International Monetary Fund. (The United Kingdom, Hong Kong and France — the next three top finishers — each registered just over $1 trillion.)
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So where does that leave us? As Warren Buffett put it recently, the U.S. economy has gone from springing a few leaks to spewing one big gusher. But given our history and unique ability to adapt, we are anything but down and out. The world has changed, and the United States must respond more nimbly to the hard realities of global interdependence. But as “the sage of Omaha” reminded us, this is a fine time to buy into the long-term future of America — not out of blind patriotism but because it makes good, sound business sense.
James P. Moore Jr. is a professor at Georgetown University’s McDonough School of Business and is the director of the school’s Global Leadership Initiative. He wrote this article for the Washington Post.
We’re All Doomed, Doomed I Tell You!
According to the UK’s Independent, we’ve passed the point of doing anything about global warming….We’re Doomed:
Scientists have found the first unequivocal evidence that the Arctic region is warming at a faster rate than the rest of the world at least a decade before it was predicted to happen.
…The phenomenon, known as Arctic amplification, was not expected to be seen for at least another 10 or 15 years and the findings will further raise concerns that the Arctic has already passed the climatic tipping-point towards ice-free summers, beyond which it may not recover. (Emphasis Mine)
An explanation of why this find is sooooooo very important, and proves global warming, once and for all, is given by Julienne Stroeve of the US National Snow and Ice Data Centre (NSIDC):
“The observed autumn warming that we’ve seen over the Arctic Ocean, not just this year but over the past five years or so, represents Arctic amplification, the notion that rises in surface air temperatures in response to increased atmospheric greenhouse gas concentrations will be larger in the Arctic than elsewhere over the globe.”
Um, wait, what? NOTION?
notion"‚
–noun 1. a general understanding; vague or imperfect conception or idea of something: a notion of how something should be done.
2. an opinion, view, or belief: That’s his notion, not mine.
3. conception or idea: his notion of democracy.
4. a fanciful or foolish idea; whim: She had a notion to swim in the winter.
Notice the definition doesn’t include “fact,” “proven” or replicated. “Notion,” by definition, isn’t even as substantive as “theory.”
Alright, it’s easy to pick on the poor ladies words. Perhaps she had no notion what she was really saying when she used the word “notion!”
The article goes on to lay out the “facts” used to make the determination that the world is coming to an end:
Temperature readings for this October were significantly higher than normal across the entire Arctic region – between 3C and 5C above average – but some areas were dramatically higher. In the Beaufort Sea, north of Alaska, for instance, near-surface air temperatures were more than 7C higher than normal for this time of year. The scientists believe the only reasonable explanation for such high autumn readings is that the ocean heat accumulated during the summer because of the loss of sea ice is being released back into the atmosphere from the sea before winter sea ice has chance to reform.
Hmmmmm, October, October. Wasn’t there something special about global warming in October? Oh yeah, I remember. October was the hottest October ever on record…Oh, no, my bad. As I noted here, it wasn’t. In fact, part of the “error” for October created the appearance of a hotspot in the Artic:
The error was so glaring that when it was reported on the two blogs – run by the US meteorologist Anthony Watts and Steve McIntyre, the Canadian computer analyst who won fame for his expert debunking of the notorious “hockey stick” graph – GISS began hastily revising its figures. This only made the confusion worse because, to compensate for the lowered temperatures in Russia, GISS claimed to have discovered a new “hotspot” in the Arctic – in a month when satellite images were showing Arctic sea-ice recovering so fast from its summer melt that three weeks ago it was 30 per cent more extensive than at the same time last year.
Is it just me or does anyone else notice that Ms. Stroeve’s “doom data” looks an awful lot like the data the number one global warming acolyte had to retract?
I’m sure Ms. Stroeve didn’t use the incorrect data to create her alarm. It would seem like data integrity would be the first thing that any scientific claim or theory would want to insure and verify. I’m sure the “error” of the GISS data was just that, an “error” and the global warming community have implement rigorous standards to ensure that something like that never happened again…or maybe not!
On a related note, Minneapolis is forecasted to have the third coldest temp ever for December 16th tonight. Maybe I should move to the Arctic!
I’m beginning to wonder who has more credibility, the global warming faithful or Britney Spears…Oops, I did it again!
December 15, 2008
Welcome Back My Friends To The Show That Never Ends
According to numerous reports, the lead Republican negotiator for the Senate Bob Corker, believed the Auto bail out bill was “within three words” of getting passed last week.
Three words. Only three words. It really doesn’t seem like much. After all, the parties had already agreed that:
- Management would take a hit – dramatically reduced salaries and bonuses, no golden parachutes, no planes. plus they would have to answer to an Auto Czar, ensure they meet CAFE standards and dump money into non fossil fuel vehicles
- Bondholders would take a hit – Bondholders had agreed to take $.30 on the dollar to reduce the debt that is held on the automakers
- Equity holders would take a hit – The government would get warrants for 20% of the equity in the participating company’s thus dilluting equity that is just above penny stock value.
- Even slackers had contributed – the UAW had to agree to do away with payments to workers who were still receiving full compensation for up to four years even after their jobs ended.
The remaining piece was to get the UAW members to make a contribution by agreeing to adjust their compensation. Larry Kudlow describes Corker’s efforts best:
During the negotiations Corker tried to be as compromising as possible on the tough question of wages, benefits, and overall compensation. He asked the union to be competitive, but he never specified parity or complete equality with the foreign transplants. And Corker provided that the comp-package would be certified next year by the secretary of Labor "” an Obama selection. In addition, the Senate governing the package would be made up of 58 Democrats, rather than today’s 50.
All Corker asked was a 2009 date for union pay restructuring. Sen. Corker never specified his date. He asked the UAW to name its date for a new pay package. But it had to be in 2009. In return, union members would get a lot of stock in this deal "” up to $10.5 billion of new equity as GM’s heavy debt burden would be converted into common shares.
To this request, one that should be a throw away if, as UAW President, Ron Give-u-the-finger claims, the Big 3 are only $.44/hour different than the foreign competitors, the UAW President gave Corker the finger.
Instead, immediately following the vote, Give-u-the-finger started his media campaign of blaming Republicans, and their hatred of unions, as the reason that the bill was tubed. This weekend, the new meme was carried by many of the MSM. One of the dysfunctional arguments was made by McClatchy.
The article starts by stating the “Republicans hate unions” meme. They then toss in a paragraph that was intended to be a throw away:
It also helped that their constituents made clear how much they disliked the idea of another bailout.
They then go on to lay out how the Republicans were skeptical of the $700 billion TARP bill. They also recognize the Republican platform is for smaller government and less government intervention….Damn, principles!
After puking some more about how Republicans were just out to get unions, another throw away paragraph is inserted:
They also liked how he and his colleagues were following the first rule of politics: Know your constituency.
McClatchy recognizes that a majority of Americans are against any bail out of the Big 3. They also recognize that constituents, after feeling fooled by the TARP plan, are now angry as more pigs show up at the government trough. Yet somehow, McClatchy believes that the Republican Senators should have thumbed their noses at the folks who put them in office and vote to slap the taxpayers once again.
While Republican Senators finally stood on some principle in negotiating the bail out, it doesn’t appear that the “Republican” President feels the same compunction. Rumor has it that President Bush is urging Hank Paulson to use some of his TARP money to “bridge” the auto makers until Obama is in office.
It’s unclear what the next steps are for the Big 3. However, I’m sure the Congress has not heard the last from Ron Give-u-the-finger and his cohorts. In fact, with the “never say no” attitude of Nancy, Harry, Hank and President Bush, it may be appropriate to open each day of Congress with the first 10 seconds of this:
December 12, 2008
Who got $2 trillion in “emergency” Fed Reserve loans?
(H/T – Dad29)
Bloomberg L.P. is trying to find out, but the Federal Reserve has refused a FOIA request asking for the recipients of more than $2,000,000,000,000 in emergency loans from 11 Fed lending programs, as well as the assets the Fed accepted as collateral. A majority of that, $1.23 trillion, was sent out after the Fed started accepting collateral that was rated worse than AAA on September 12.
The Fed, in its denial, said that there were 231 pages of records stemming from a partial search. Also from the denial, written by Jennifer J. Johnson, secretary for the Fed’s Board of Governors: “Notwithstanding calls for enhanced transparency, the Board must protect against the substantial, multiple harms that might result from disclosure…. In its considered judgment and in view of current circumstances, it would be a dangerous step to release this otherwise confidential information.”
Jim Rodgers, a prominent international investor, speculates that most of the banks are bankrupt. Dad29 runs with that and says that “…the Fed doesn’t want another short-selling frenzy.”
Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, has the $64,000 $2 trillion statement – “If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know.”
Handy new plugin – Delete-Revision
I haven’t been a big fan of the revision system that has been in WordPress since 2.6. Yes, it has saved me a couple times, but it takes up a lot of database space, and there is no way to eliminate all the revisions.
Fortunately, a guy named goshy came up with Delete-Revision. It will go through your wp-posts database and let you easily and quickly take out all the revisions except the actual post. While it is not officially tested with WP 2.7, it does work seamlessly. The only operationally-bad part; it’s an all-or-nothing operation.
8 Maids a Milking
Late last night the Senate defeated the Big 3 bailout on a procedural vote of 52-35. In order to pass, the bill needed 8 more votes. After the final tally, the Senators had an opportunity to voice their opinions in closing remarks. As one would surmise, the Democrats took the partisan position and cast blame to the other side of the aisle for the defeat of the $14 billion bailout. The exchange between Senator Durbin and Senator Specter below is enlightening, especially given the fact that Senator Specter supported the bailout.
Excerpt from Senator Dick Durbin (IL-D) comments:
I don’t know if this rescue package would have worked. I am not sure. I don’t know if it would have been enough, or whether it would have failed, but I thought we owed our best efforts to try to save an industry that means so much to America in so many States, whether it is Michigan or Indiana or Ohio or Illinois, thousands of workers, in Missouri, 55,000 workers; so many workers depend on this industry. We had a chance to do something for them tonight and we failed. We failed because we couldn’t bring over enough votes from the other side of the aisle to come to the magic number of 60.
Excerpt from Senator Arlen Specter (PA-R) rebuttal:
Madam President, I have sought recognition to comment on the cloture vote and to give my reasons for voting in support of cloture. Before I do, however, I wish to comment about where the responsibility lies for failure to invoke cloture to move this bill forward, and my hope that we would avoid fingerpointing and trying to assess blame, each on the other side, as has become the pattern in this body during the course of the last 2 years of the 110th Congress and beyond.
The Senator from Illinois said there were not sufficient votes on the Republican side of the aisle. Well, there were sufficient votes on the Republican side of the aisle, had they been joined with sufficient votes on the Democratic side of the aisle. There were 10 Republican Senators who voted to invoke cloture: Senator Bond, Senator Brownback, Senator Collins, Senator Lugar, Senator Voinovich, Senator Warner, Senator Dole, Senator Domenici, Senator Snowe, and myself.
There are 51 Senators on the other side of the aisle. Had those 51 Senators–or 50 of them joined with the 10 Republican Senators, cloture would have been invoked. But it would be my hope that we would leave this evening without partisan blame and still seek some way to get the kind of economic assistance that would enable the Big Three to continue to operate.
Sad commentary on the Democrats inability to hold ranks and then have the audacity to point the finger at the Republicans for bringing this bill to its knees………..and a “partisan” in a pear tree!
Santa goes color bli…er, “green”
(H/T – Josh Schroeder)
The Portage Daily Register reports on the use of Santa Claus and his friends to indoctrinate the young skulls full of mush at Lewiston Elementary School in Portage, Wisconsin. From thin snowmen to Coppertone-spreading elves to Rudolph’s new LED nose, the “Santa Goes Green” holiday program was dripping with every cliche from the Religion of Gorebal “Warming”. At least the color-blind who don’t have green can still wear red.
WFLD-TV (Chicago Fox affiliate) – Rahm Emanuel spoke with Blagojevich, Harris about filling Obama’s seat
(H/T – Ed Morrissey)
I’ll start with the standard disclaimers that this comes from an unnamed source, that Barack Obama’s chief of staff, Rahm Emanuel, has not been named in the criminal complaint against Illinois governor Rod Blagojevich (D) and Blagojevich’s chief of staff, John Harris, and that the report referenced below does not actually state that Emanuel was actively selling the seat to Blagojevich and Harris.
WFLD-TV, the Fox affiliate in Chicago, aired a report last night asserting that a “reliable source familiar with the investigation” stated that Emanuel had conversations with both Blagojevich and Harris about candidates for the seat that has now been vacated by Obama. According to that source, the conversations, which took place on “multiple occassions” after Emanuel was named as Obama’s chief of staff November 6 (and after the wiretaps began), included a list of names “acceptable to President-elect Obama” given to the governor’s office. The source went on to say that the conversations were likely recorded by the FBI. The report notes that the source did not say one way or the other whether those conversations invovled any quid pro quo.
My gut feeling on this is that Obama cannot have January 20 come fast enough so he can oust US Attorney Patrick Fitzgerald and shut this down before any indictment against Blagojevich and Harris can be handed down, and before the taint can officially spread to his closest advisor. If a grand jury comes down with an indictment before then, and especially if things are as they appear (or worse), Obama is screwed.
Good news and bad news on the Big Thr…er, UAW bailout (update – not good news)
The good news – cloture on the bill failed in the Senate 52-35.
The bad news – President Bush and the Congressional Democrats are still bound and determined to explicitly bail out the UAW this year.
The ugly news – Once the 111th Congress comes into session on January 6, 2009, the filibuster roadblock will be no more. Let’s review how the bipartisan Party-In-Government will pick up the necessary 8 votes (I will assume that the seat vacated by Barack Obama remains vacated, that Norm Coleman, who voted against this, is seated, and that Hillary Clinton, who voted for cloture, and Joe Biden, who was absent, either remain in the Senate for the first couple days of the 111th Congress or their appointed replacements are seated):
– Harry Reid (D-NV; “No”) – Voted “No” only to keep the possibility of bringing this back in this Congress. When he will be able to get to 60, that will become a “Yes” vote.
– Wayne Allard (R-CO; “No”) – He’s retiring, and the seat will be filled by Democrat Mark Udall
– Joe Biden (D-DE; “Not voting”) – This is a special case; I don’t know whether this seat will be officially vacant come January 6, but if it isn’t, it’s another vote for cloture.
– Ted Stevens (R-AK; “Not voting”) – He was defeated for re-election by Democrat Mark Begich.
– John Sununu (R-RI; “Not voting”) – He was defeated for re-election by Democrat Jeanne Shaheen.
– Gordon Smith (R-OR; “Not voting”) – He was defeated for re-election by Democrat Jeff Merkley.
– Ted Kennedy (D-MA; “Not voting”) – They’ll wheel him in if needed to become vote #60.
– John Kerry (D-MA; “Not voting”) – He’ll definitely show up to vote for the UAW and welfare.
– Ron Wyden (D-OR; “Not voting”) – He’ll be around for the UAW.
Revisions/extensions (8:16 am 12/12/2008) – And the truly-ugly news courtesy CommentGuy over on the linked Michelle Malkin thread: That vote was on the annual AMT “fix”, not the UAW bailout bill. I didn’t see anything that suggested that the UAW bailout bill got appended to the annual AMT fix.
We’re not done yet.
I Hate To Say I Told You So But…
I warned you yesterday that the Auto Industry Financing and Restructuring Act (the auto bail out) had nothing to do with wanting to create a financially viable automotive industry.
In an interview with 60 Minutes to be aired this weekend, Barney Frank provided another unusual moment of candor. He admits to Lesley Stahl that the bailout is not intended to support the economic viability of the auto companies:
“No. We’re not propping up companies. That’s your mistake,” he tells Stahl, who had asked him about taxpayer money going to prop up companies that had made bad decisions. “We’re propping up individuals. The world doesn’t consist of companies. The world is people. The country is people.”
After Stahl points out that Frank is advocating welfare on a national scale, Frank channels Joe Biden when he told us that we were greedy if we weren’t willing to pay higher taxes:
“Yeah, I’m for welfare. You’re not? Are you for letting people starve?”
Finally, Frank tells Stahl why he doesn’t like the idea of the auto makers going into bankruptcy:
“There’s only one thing you can do in bankruptcy: break your word, break your deals,” says Frank. “It allows you to say to the small businesses who have been catering lunches for you"¦the workers, ‘Sorry, we’re not paying you.'”
The Country just elected a President who, for over a year, campaigned on an unashamed platform of national welfare and socialism. Barney Frank represents the left who clearly believe that Obama was elected to enact the policies he campaigned on.
Obama’s election has allowed people like Frank to drop their guards and talk openly about their desire to trap as much of the country as they can to the mastery of financial enslavement. Sure, they frame it in phrases like “keeping your word” and “I won’t let people starve.” However, if we’ve learned nothing else from over forty years of attempts at social engineering, we’ve surely learned that removing people from the consequences of their actions and telling them that their effort and merit should not be the basis of their success, is as sure fire way to ensure that they never become successful.
I’m still unsure whether Obama was elected for the policies he espoused during his campaign or whether it was a vote that combined historical implications with anti incumbency fervor and a largely undifferentiated alternative candidate. If it is the later, the American people will not support the continued “bail out o’rama” and will provide some backbone stabilization for the Republican caucus in the Senate. If the prior, Frank and his ilk will become more brazen about “to each, according to his need.” If the prior, the answer to “when will the bail outs end” will become “never” because as Frank has pointed out “We’re propping up individuals” and it’s going to take a long time to prop up over 300 million.
December 11, 2008
There Will Be Rioting In the Streets!
In an interview yesterday, Senator Jim DeMint made the following comments while discussing the possible auto bailout:
"We’re going to have riots. There are already people rioting because they’re losing their jobs when everybody else is being bailed out. The fairness of it becomes more and more evident as we go along. The auto companies may be hurting," he said, but "there are very few companies that aren’t hurting and they’re going to hurt. We don’t have enough money to bail everyone out." (emphasis mine)
Wow! People are rioting because of the bailouts? Where have I been?
Flash to google. Quick Check “US riot”…..response
….Greek riots
….Chinese worker riots
….Iceland riots
….Zimbabwe riot
….Afghans riot
…Iraqi riot
…Thailand riot
….Quiet Riot
Huh, can’t find a darn thing about US riots.
I agree with DeMint’s sentiment that the bailouts need to cease. The government has tried everything and have found nothing that works. However, inserting this level of hyperbole into an issue that does have high emotion and large consequence attached to it does nothing but diminish the credibility of DeMint’s usually clear thinking.
Fight the fight Senator DeMint, but leave the “over the top” language for those who have no facts and are left to argue only with emotion.
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